Senate Bill 118, introduced by State Sen. Mamie Locke, passed the committee 8-6, with one abstention. The measure had previously advanced through the General Laws and Technology Committee, where lawmakers adopted a series of amendments, including strengthened responsible gambling and problem gambling provisions.

Tax Structure and Licensing Framework

If enacted, SB 118 would authorize regulated internet casino gaming under the oversight of the Virginia Lottery Board. The proposal sets a 15% tax rate on operator adjusted gross revenue, aligning with the rate currently applied to sports wagering in the state.

The bill also establishes a licensing framework that includes:

• A $2 million operator platform license fee, allowing up to three online skins per operator
• A $500,000 initial internet operator license fee
• Allocation of 5% of tax revenue to the state’s Problem Gaming Treatment and Support Fund
• Allocation of 6% of tax revenue through January 1, 2030, to an Internet Gaming Hold Harmless Fund aimed at addressing potential cannibalization concerns

The inclusion of the hold harmless mechanism reflects ongoing debate about the potential impact of iGaming on existing land-based casino revenues.

Proposed Ban on Sweepstakes Casinos

A key provision of SB 118 targets sweepstakes-style casino platforms, which have drawn regulatory scrutiny in multiple U.S. states in 2025. The legislation would prohibit such operations in Virginia, imposing a $100,000 civil penalty for a first violation and $250,000 for subsequent offenses. The bill further stipulates that each day a violation continues would constitute a separate offense.

Under the proposal, the Virginia Lottery Board would be empowered to conduct hearings and issue cease-and-desist orders against operators found to be in violation.

Companion Measure in the House

A parallel bill, HB 161, introduced by Del. Marcus Simon in the House of Delegates, recently passed the General Laws Committee and has been referred to Appropriations.

However, Simon’s version includes a notable provision: iGaming authorization would only take effect if the 2027 General Assembly reenacts key elements of the legislation, effectively creating a delayed or conditional implementation framework.

As SB 118 heads to the Senate floor, Virginia joins a growing list of states actively debating the future of regulated online casino gaming, with tax policy, consumer protections, and competitive market balance at the center of the discussion.